We have a college fund for our daughter. My parents want to give us a lump sum for her fund instead of giving us an amount every year. Would you put the lump sum in your current account or open a new one for it? I'm asking because they asked me.
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Current account - I don't know what would be the purpose of having 2 accounts?..
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I would put it in the current account...so it's all together.
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Current account. Curious what kind of account you have and if you like it? @mediagirl:
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The only advantage to two accounts would be if your parents live in a different state from your 529 plan and there is a tax advantage in their state.
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@JCCovi: yep, we all live in the same state.
@Boogs: we have a plan in NC and have no big complaints.
@pinkcupcake: my brother told them to create a separate one for his boys. They have a specific reason for it, though. We don't have the same reason to do so. -
Consolidate into one for sure. There is no reason not to since gifting limits for 529s are determined per donor not per beneficiary.
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Current account. We have one big account for all 3 (and soon to be 4...gulp) kids.
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IIRC there can be some advantages to grandparents being the account owner vs the parents due to financial aid considerations. However, if the parents are going to be the account owner (with your child as the beneficiary) then it doesn't really matter if the money is in one account or in two.
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Current account!
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Do you have just a general savings account as your "current account" or an actual college 529 fund?
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Current account! Each of our kids has their own 529. So we add accordingly when they're gifted $$.
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If they want a state tax deduction (not sure if that is available in their state), then they have to open their own account on behalf of each child.
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Current account
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@T.H.O.U.: we have both but 99.9% of her money goes to her 529 right now.
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@raintreebee: NC dropped the tax deductions for 529 accounts in 2014.
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My MIL did this (gave a very generous lump sum for LO’s college when LO was born). My MIL ended up opening her own 529 through her financial person, which is part of the trust funds that she set up for LO. We are trustees of that 529.
We also have a second one that we opened for LO because our state gifts up to $3,000 in matching funds when parents open a state 529 account.
So - being someone with 2 529 accounts, I would personally prefer to have all the $$ in one place so it can earn more interest on the higher total sum, but if they prefer to open their own 529 or have any preference on doing that we have not had any issues in the past 3.5 years managing 2 separate accounts.
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If there aren't tax benefits, I'd put it all together for simplicity's sake.
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17 comments